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Publication Date:
November 1, 2006
FRPart: IV
Page Numbers: 64401-64419
Summary: The Academic
Competitiveness Grant (ACG) and National Science and Mathematics Access
to Retain Talent Grant (National SMART Grant) programs; 34 CFR part 668
(Student Assistance General Provisions); and 34 CFR part 690 (Federal
Pell Grant Program). These final regulations are needed to implement provisions
of the Higher Education Act of 1965 (HEA), as amended by the Higher Education
Reconciliation Act of 2005 (HERA)
Posted on 11-01-2006
[Federal Register: November 1, 2006 (Volume 71, Number 211)]
[Rules and Regulations]
[Page 64401-64419]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr01no06-22]
[[Page 64401]]
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Part IV
Department of Education
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34 CFR Parts 668,
690, and 691
Student Assistance
General Provisions; Federal Pell Grant Program; Academic Competitiveness
Grant Program; and National Science and Mathematics Access to Retain Talent
Grant Program; Final Rule
[[Page 64402]]
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DEPARTMENT OF EDUCATION
34 CFR Parts 668,
690, and 691
RIN 1840-AC86
Student Assistance General Provisions; Federal Pell Grant Program; Academic
Competitiveness Grant Program; and National Science and Mathematics Access
to Retain Talent Grant Program
AGENCY: Office of
Postsecondary Education, Department of Education.
ACTION: Final regulations.
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SUMMARY: The Secretary
is adopting as final, with changes, interim final regulations in: 34 CFR
part 691 for the Academic Competitiveness Grant (ACG) and National Science
and Mathematics Access to Retain Talent Grant (National SMART Grant) programs;
34 CFR part 668 (Student Assistance General Provisions); and 34 CFR part
690 (Federal Pell Grant Program). These final regulations are needed to
implement provisions of the Higher Education Act of 1965 (HEA), as amended
by the Higher Education Reconciliation Act of 2005 (HERA), Pub. L. 109-171,
enacted on February 8, 2006, 20 U.S.C. 1070a-1.
These final regulations for the ACG and National SMART Grant programs
specify the eligibility requirements for a student to apply for and receive
an award under these programs for the 2007-2008 award year. For regulations
that will take effect for the 2008-2009 award year and subsequent award
years, the Secretary intends to conduct negotiated rulemaking, as required
under section 492 of the HEA.
DATES: Effective
Date: These final regulations are effective July 1, 2007. Implementation
Date: The Secretary has determined, in accordance with section 482(c)(2)(A)
of the HEA (20 U.S.C. 1089(c)(2)(A)), that institutions of higher education
(institutions), State educational agencies (SEAs), and local educational
agencies (LEAs) that administer title IV, HEA programs may, at their discretion,
choose to implement all of the provisions of these final regulations on
or after November 1, 2006, including for the 2006-2007 award year. For
further information, see ``Implementation Date of These Regulations''
under the SUPPLEMENTARY INFORMATION section of this preamble.
FOR FURTHER INFORMATION
CONTACT: Jacquelyn Butler, U.S. Department of Education, 1990 K Street,
NW., Room 8053, Washington, DC 20006-8544. Telephone: (202) 502-7890.
Sophia McArdle, U.S. Department of Education, 1990 K Street, NW., Room
8019, Washington, DC 20006-8544. Telephone: (202) 219-7078.
If you use a telecommunications device for the deaf (TDD), you may call
the Federal Relay Service (FRS) at 1-800-877-8339. Individuals with disabilities
may obtain this document in an alternative format (e.g., Braille, large
print, audiotape, or computer diskette) on request to the contact person
listed under FOR FURTHER INFORMATION CONTACT.
SUPPLEMENTARY INFORMATION:
On July 3, 2006, the Secretary published interim final regulations (71
FR 37990) implementing the ACG and National SMART Grant programs added
to the HEA by the HERA. The interim final regulations were effective on
August 2, 2006. At the time the interim final regulations were published,
the Secretary requested public comment on whether changes to the regulations
were warranted. The July 3, 2006, interim final regulations included a
discussion of the major issues covered by the regulations. The following
list summarizes those issues and identifies the pages of the preamble
to the July 3, 2006, interim final regulations on which a discussion of
those issues can be found:
The Secretary repeated in the ACG and National SMART Grant regulations
several definitions and sections from the Federal Pell Grant Program regulations
(71 FR 37990-37991). The Secretary specified that only students who are
United States citizens are eligible to receive ACG and National SMART
Grants (71 FR 37991).
The Secretary detailed the requirements for institutions to follow when
resolving overpayments to students under the ACG and National SMART Grant
programs (71 FR 37991).
The Secretary defined eligible major for purposes of the National SMART
Grant Program (71 FR 37991).
The Secretary defined eligible program for the ACG and National SMART
Grant programs (71 FR 37991).
The Secretary specified the duration of student eligibility for the ACG
and National SMART Grant programs by academic year (71 FR 37991). The
Secretary delineated the institutional participation requirements, including
a requirement that an institution that participates in the Federal Pell
Grant Program and offers an educational program that is an eligible program
for the ACG or National SMART Grant programs, must participate in the
ACG and National SMART Grant programs (71 FR 37992).
The Secretary specified the circumstances under which correspondence courses
may be applied toward a student's full-time enrollment status in a noncorrespondence
study program (71 FR 37992). The Secretary delineated the requirements
for a student to attend more than one institution and receive an ACG or
National SMART Grant (71 FR 37992). The Secretary specified the procedures
that a student must follow when applying for an ACG or National SMART
Grant (71 FR 37992). The Secretary set forth the ACG and National SMART
Grant general student eligibility requirements (71 FR 37992). The Secretary
specified the application of an academic year to a student's eligibility
for an ACG and National SMART Grant (71 FR 37992).
The Secretary provided the grade point average (GPA) requirements for
receiving an ACG or National SMART Grant (71 FR 37993). The Secretary
provided the circumstances under which a student is not eligible for an
ACG in the student's first academic year of enrollment if the student
previously enrolled in a program of undergraduate education (71 FR 37993-37994).
The Secretary specified the institutional requirements for documenting
a student's completion of a rigorous secondary school program of study
(71 FR 37994-37995). The Secretary stated the student requirements for
declaring an eligible major in order to be eligible for a National SMART
Grant (71 FR 37994). The Secretary provided guidelines for recognizing
a rigorous secondary school program of study for ACG eligibility (71 FR
37994). The Secretary delineated how eligible majors will be determined
and their duration for the National SMART Grant Program (71 FR 37995).
The Secretary specified how the maximum ACG and National SMART Grants
will be determined each year (71 FR 37995-37996).
The Secretary stipulated how ACG and National SMART Grant funds are treated
in relation to other aid received (71 FR 37996). The Secretary detailed
how an institution calculates an ACG or National SMART Grant payment for
a payment period (71 FR 37996). The Secretary specified how an institution
calculates an ACG or National SMART Grant payment for a student who transfers
from another institution (71 FR 37996). The Secretary detailed the requirements
that govern an institution's
determination of a student's eligibility for a disbursement of an ACG
or National SMART Grant, including provisions regarding changes in a student's
GPA, payment prior to receipt of a GPA, payments for nonterm self-paced
programs, and, for National SMART Grants, changes to a student's major
(71 FR 37996-37997).
The Secretary specified how often an institution may pay a student (71
FR 37997). Implementation Date of These Regulations: Section 482(c) of
the HEA requires that regulations affecting programs under title IV of
the HEA be published in final form by November 1 prior to the start of
the award year (July 1) to which they apply. However, that section also
permits the Secretary to designate any regulations that an entity subject
to the regulations may choose to implement earlier and the conditions
under which the entity may implement the provisions early. The Secretary
is using the authority granted to her under section 482(c) to designate
all of the regulations included in this document for early implementation,
beginning with the 2006-2007 award year, at the discretion of each institution,
SEA, and LEA.
Analysis of Comments
and Changes
The regulations
in this document were developed through the analysis of comments received
on the interim final regulations published on July 3, 2006. The Secretary
invited comments on the interim final regulations, and we received 80
comments. An analysis of the comments and of the changes in the regulations
since publication of the interim final regulations follows. We group major
issues according to subject, with appropriate sections of the regulations
referenced in parentheses. Generally, we do not address technical and
other minor changes.
General Comments
Comments: One commenter
was concerned that the ACG and National SMART Grant program requirements
would intrude on the academic policies of institutions with regard to
credit accrual, calculation of GPA, determinations of academic progress,
the treatment of transferred credits, and academic year standing. The
commenter believed that permitting institutions to follow current business
processes and practices would be in accord with current delivery systems
and be clear
to students.
Discussion: The Secretary has no intention of interfering with institutions'
academic policies and administration. Many of the program requirements
about which the commenter is concerned are required by the HEA. The program
requirements in the regulations are necessary to deliver ACGs and National
SMART Grants to students and do not mandate any changes in institutional
academic policies or administration.
Changes: None.
Section 691.2 Definitions
Comments: Several
commenters believed that the term Scheduled Award is inappropriately applied
to the ACG and National SMART Grant programs. The commenters believed
that the term is confusing because the term relates to award year eligibility
for Federal Pell Grants, which are payable for part-time enrollment, but
is being applied to academic year eligibility for ACGs and National SMART
Grants, which are payable for full-time enrollment only. Some commenters
acknowledged the Secretary's need for a term that could be applied if
the grants were subject to ratable reduction, but suggested that the Secretary
use a different term. Others believed that the term would introduce unnecessary
complexity into the ratable reduction process.
Discussion: The Secretary believes that it is prudent to keep the ACG
and National SMART Grant programs as similar to the Federal Pell Grant
Program as possible within the constraints of the law. The Secretary believes
the term Scheduled Award is appropriately applied to all three programs,
as it refers to the amount a full-time student can be awarded for a full
academic year, as in the Federal Pell Grant Program. Also, the term is
appropriate as funds are allocated by award year, and the Secretary establishes
the maximum Scheduled Award for that award year. Because the programs
require only full-time enrollment as an eligibility criterion, there will
not be Payment and Disbursement Schedules published as there are for the
Federal Pell Grant Program, but the concept of Scheduled Award does apply
with regard to such issues as remaining eligibility for transfer students
and ratable reductions.
Changes: None.
Comments: Several commenters believed that it was unclear whether proprietary
institutions could participate in the ACG and National SMART Grant programs.
Discussion: Under the regulations, an otherwise eligible proprietary institution
that offers an eligible program as defined in Sec. 691.2 may participate
in the ACG and National SMART Grant programs. Section 691.2 specifies
that these regulations use the definition of eligible institution in 34
CFR part 600. This definition includes institutions of higher education,
as defined in Sec. 600.4; proprietary institutions, as defined in Sec.
600.5; and postsecondary vocational institutions, as defined in Sec. 600.6.
Changes: None.
Comments: Several commenters believed that title IV-eligible certificate
programs should be included in the definition of an eligible program.
The commenters argued that, while the law provides that a student must
be enrolled or accepted for enrollment in a two- or four-year degree granting
institution to be eligible for an ACG, or in a four-year degree granting
institution to be eligible for a National SMART Grant, it does not prohibit
a student from receiving an ACG or National SMART Grant for attending
a certificate program offered by such a degree-granting institution. Many
commenters asserted that certificate programs are just as important, if
not more important, than degree programs to the future economic growth
of States and the nation, and the students just as deserving of these
grants as those enrolled in degree programs. In addition, the commenters
asserted that many certificate programs attract the same caliber of students
as those enrolled in degree programs. Several commenters noted that many
students who initially seek certificates subsequently transfer into degree
programs. A few commenters suggested including in the definition of eligible
program certificate programs that are fully transferable into baccalaureate
degree programs and certificate programs that are fully acceptable for
credit toward an associate's degree. One commenter believed that, if certificate
programs were not considered eligible outright, then the definition of
an eligible program should include one-year programs that are fully acceptable
for credit toward an associate's degree. The commenter asserted that,
as with a two-year program that is fully acceptable for credit toward
a bachelor's degree, the end result is an acceptable two- or four-year
degree. One commenter
noted that the Department's position is counter to the longstanding policy
permitting an institution to designate a program as eligible for all title
IV programs.
Several commenters supported including in the definition of an eligible
program graduate degree programs that include at least three academic
years of undergraduate education. One commenter asked the Secretary to
clarify a student's eligibility for a National SMART Grant if the student's
status has
changed to graduate student because he or she is in the fourth year of
a graduate program that contains at least three undergraduate years. One
commenter believed that the definition of an eligible program should not
include a graduate degree program that includes at least three academic
years of undergraduate education. The commenter noted that this interpretation
appears broader than the requirements for Federal Pell Grant eligibility
for programs that include a fifth year that counts toward a graduate degree
program, primarily education certification. The commenter suggested that
the regulations reference Sec. 668.8, which defines an eligible program
for other title IV, HEA eligibility.
Discussion: The Secretary has determined that because the HEA limits eligibility
to a student enrolled or accepted for enrollment in a two- or four-year
degree-granting institution, eligibility must be limited to two- or four-year
degree programs, as defined in Sec. 691.2. Therefore, certificate programs
do not qualify as eligible programs for ACGs. However, a student in a
two-academic-year program acceptable for full credit toward a bachelor's
degree may qualify, provided he or she meets other eligibility criteria.
Because only students attending four-year institutions are eligible for
National SMART Grants and a student must be enrolled in the third and
fourth academic years to be eligible, the Secretary believes that a student
must be enrolled in at least a bachelor's degree program to be eligible
for a National SMART Grant.
Section 401A(c)(3)(C) of the HEA, in defining the term eligible student,
refers to a student enrolled or accepted for enrollment in specific years
of a program of undergraduate education. Although a graduate degree program
that includes at least three years of undergraduate education may be an
eligible program for ACG and National SMART Grant purposes, under section
401A(c) of the HEA, a student enrolled in such a program is eligible for
an ACG or National SMART Grant only while the institution considers the
student to be an undergraduate student in accordance with the definition
of undergraduate student in Sec. 691.2. Once a student is considered to
be a graduate student, the student is no longer eligible for a National
SMART Grant. With respect to the definition of an eligible program, it
is important to define eligibility for students enrolled in a program
that leads directly to a graduate degree without first awarding a bachelor's
degree. Students enrolled in these programs have a period of undergraduate
work for which they should be eligible for ACG and National SMART Grant
funds notwithstanding the fact that the programs are structured differently
than the typical separate degree programs for undergraduate and graduate
programs. For programs that start at the undergraduate level and lead
directly to a graduate degree without defining when the student is considered
an undergraduate and graduate student, the definition in Sec. 691.5 allows
eligible students to receive the appropriate funds from these two grant
programs.
Changes: None.
Section 691.6 Duration
of Student Eligibility--Undergraduate Course of Study
Comments: Many commenters
objected to the Department's decision to base the duration of eligibility
on an academic year as defined for purposes of the title IV, HEA programs,
as measured in weeks of instructional time and, for undergraduate programs,
credit or clock hours. These commenters stated that using the title IV,
HEA definition of academic year was administratively burdensome and unworkable.
Some commenters found the definition of academic year in part 691 to be
inconsistent with other uses of the term in administering title IV, HEA
programs. One commenter believed that only the credit hour portion of
the definition of academic year should be used. Commenters also were concerned
that a student's title IV, HEA academic year may not match the student's
grade level used in the other title IV, HEA programs such as the FFEL
and Direct Loan programs. The commenters recommended that the Secretary
rely on grade level progression as in the FFEL and Direct Loan programs
to determine the first, second, third, or fourth year of a student's enrollment.
Discussion: Under section 401A(c)(3) of the HEA, a student is eligible
for an ACG in the student's ``first academic year of a program of undergraduate
education'' and ``second academic year of a program of undergraduate education''
and for a National SMART Grant in the ``third or fourth academic year
of a program of undergraduate education.'' The term academic year is defined
in section 481(a)(2) of the HEA as amended by the HERA and explicitly
applies to all title IV, HEA programs. The definition provides that an
academic year contains a minimum number of weeks of instructional time
and a minimum number of credit or clock hours. The Secretary has no flexibility
to deviate from this defined term. Contrary to the assertions of some
commenters, the Secretary believes that the interpretation of the term
academic year in the regulations is not inconsistent with other title
IV uses of the term.
For example, the HEA provisions governing loan limits provide greater
flexibility in this regard than does section 401A for ACGs and National
SMART Grants. Specifically, section 428(b)(1)(A) of the HEA sets loan
limits based on whether the student has ``successfully completed'' a ``year''
of a program of undergraduate education. The Secretary has interpreted
the term ``successfully completed the first year of a program of undergraduate
education'' in section 428 to relate to a student's grade level, as determined
by the institution. The Secretary did not, in so doing, interpret the
term academic year as referring to the borrower's year in college. Instead,
the Secretary interpreted the entirely different phrase ``first year.''
The Secretary has no flexibility to interpret section 401A in a similar
fashion, because, unlike section 428, section 401A specifically uses the
statutorily defined term academic year. The Secretary cannot limit the
definition to the credit hour provisions, as was suggested by the commenters,
because the statutory definition of academic year requires a minimum number
of weeks of instructional time, in addition to the completion of
a minimum number of credit or clock hours.
Changes: None.
Comments: Some commenters were concerned with the effect previous enrollment
in eligible programs at other institutions and the amount of transfer
credits accepted would have on a student's academic progression. One commenter
questioned whether academic progression was based on attendance in each
eligible program separately, or on the student's attendance in all eligible
programs at any institution. Another commenter thought institutions should
be allowed to count the credits that are being accepted for a transfer
student in the same way credits are counted for other programs, rather
than trying to monitor previous credits differently for ACGs and National
SMART Grants.
Discussion: For purposes of ACGs and National SMART Grants, a student's
academic progression is not based on the student's enrollment in each
eligible program separately, but rather is based on all eligible programs
in which a student has enrolled over the course of the student's undergraduate
education. An institution is responsible for determining whether any previous
enrollment by a student as measured in weeks
of instructional time and hours affects the student's eligibility for
an academic year. If the student previously received an ACG or National
SMART Grant for an academic year, or a portion of an academic year, an
institution must consider the student to have completed an eligible program
through that academic year, or that portion of an academic year, in weeks
of instructional time and hours, unless the institution has information
to the contrary. For example, if an institution accepts a transfer student
who has received a first-year ACG Scheduled Award, the institution must
consider the student to have completed his or her first year of ACG eligibility
regardless of the number of transfer credits the institution accepts.
To the extent a determination does not conflict with information related
to grants previously received, when determining the appropriate academic
year for a transfer student, the institution may rely on the transfer
credits accepted, along with the estimated number of weeks of instructional
time completed in proportion to the academic year of the student's eligible
program at the institution to which the student transferred.
Changes: The Secretary has amended Sec. 691.6(a) and (b) to clarify that
a student's academic year progression is based on attendance in all eligible
programs in which the student has enrolled over the course of the student's
undergraduate education.
Comments: Several commenters were concerned with the treatment of Advanced
Placement (AP) and International Baccalaureate (IB) credits and transfer
credits. One commenter sought clarification of the treatment of AP and
IB credits in relation to the requirement that a student must successfully
complete the hours of an academic year along with the weeks of instructional
time to progress to the next academic year. Some commenters were concerned
that including AP and IB credits, along with transfer credits earned while
enrolled in high school, would discourage students from taking these courses
in high school if they resulted in a student being denied eligibility
for a grant.
Discussion: AP or IB credits accepted toward a student's eligible program
count toward the completion of the hours of an academic year. Because
AP and IB credits are earned based on secondary school courses and subsequent
tests, there are no weeks of instructional time in postsecondary education
associated with these credits. A student must successfully complete both
measures of an academic year to progress to the next academic year. A
student who entered college with 24 semester hours of AP credits toward
an eligible program may be starting to earn hours toward completing the
second academic year but would still be in the first academic year because,
for purposes of an ACG or National SMART Grant, no weeks of instructional
time while enrolled in an eligible program would have elapsed. Similarly,
a student who entered college with 24 semester hours earned as a nonregular
student in an undergraduate program while enrolled in high school, or
possibly after high school, would also be in the position of starting
to earn the second academic year of credits but would still be in the
first academic year, because, for purposes of an ACG or National SMART
Grant, no weeks of instructional time while enrolled in an eligible program
would have elapsed. As a result, students will not be discouraged from
enrolling in AP or IB courses in high school or in college courses as
a nonregular student while in high school because doing so would not affect
their eligibility for an ACG or National SMART Grant.
Changes: None.
Comment: One commenter recommended that ``grade level'' be determined
once at the beginning of each award year and that the student maintain
that level of eligibility for the year as long as the student is full-time.
Discussion: The Secretary does not agree that the regulations should be
changed. Although a single annual determination may simplify the programs'
administration, it would deny an otherwise eligible
student an additional grant if the student progresses to another academic
year during the award year and qualifies for another Scheduled Award.
Changes: None.
Section 691.7 Institutional
Participation
Comments: Several
commenters believed that the requirement that an institution participate
in the ACG and National SMART Grant programs in order to continue its
participation in the Federal Pell Grant Program is an infringement on
institutional autonomy and is not supported by the statute. Commenters
noted that even in the FFEL and Direct Loan programs--where, similar to
the Federal Pell Grant, ACG, and National SMART Grant programs, one part
of the law encompasses several programs--institutional choice of participation
is allowed. Several commenters stated that it was their understanding
that the longstanding policy for the title IV, HEA programs allows an
institution to designate a particular educational program as eligible
for all title IV programs or only for some title IV, HEA programs and
recommended that the Secretary continue this policy. With so little lead
time for implementation, the commenters had concerns about the impact
of the mandatory participation on an institution's administrative capability.
Several commenters objected to the exclusion of an administrative cost
allowance for the ACG and National SMART Grant programs, particularly
because of the administrative burden of the required rapid implementation.
Some commenters believed that the Secretary was acting inconsistently
by disallowing the administrative cost allowance for the ACG and National
SMART Grant programs, as the Secretary apparently otherwise considers
the Federal Pell Grant, ACG and National SMART Grant programs, all of
which fall under subpart 1 of part A, to be conjoined, and section 489(a)
of the HEA requires the Secretary to pay an administrative cost allowance
``equal to $5 for each student at that institution who receives assistance
under subpart 1 of part A.''
Discussion: The Secretary believes that requiring an institution to participate
in the ACG and National SMART Grant programs in order to participate in
the Federal Pell Grant Program when eligible programs are offered at the
institution is consistent with the statute's requirement that the Secretary
award grants to Pell-eligible students. The Secretary believes that Congress
intended that financially needy students receive all of the grants to
which they are entitled under the HEA. Requiring institutional participation,
thus, assures that students otherwise eligible for ACGs and National SMART
Grants receive their awards.
The Secretary believes that the mandatory participation in the Federal
Pell Grant, ACG, and National SMART Grant programs is distinguishable
from the flexibility given to institutions to choose whether to participate
in the FFEL or Direct Loan Programs because needy students may be eligible
for both a Federal Pell Grant and an ACG or a National SMART Grant concurrently,
while students may only obtain loans under either the FFEL program or
Direct Loan program during a term. Under the HEA, an institution receives
an administrative cost allowance for each student receiving a Federal
Pell Grant. Because students receiving ACGs and National SMART Grants
are receiving Federal Pell Grants, the
institution does not receive an additional administrative cost allowance.
Changes: None.
Section 691.11 Payments
From More Than One Institution
Comments: Two commenters
disagreed with the requirement that the same school disburse Federal Pell
Grant funds and ACG and National SMART Grant funds when a student is attending
more than one institution under a written agreement.
Discussion: The Secretary believes that it is appropriate to require that
the same institution that administers a student's ACG or SMART Grant award
administer the student's Federal Pell Grant award, because the programs
are related in many ways. Several requirements related to the administration
of the Federal Pell Grant Program and the ACG and National SMART Grant
programs necessitate that the same institution disburse funds from these
programs.
Requirements such as that a student receive a Federal Pell Grant disbursement
in the same award year in which the student receives an ACG or National
SMART Grant, the requirement that an institution pay only on the transaction
that is the valid institutional student information record (ISIR) (and
only the institution paying the Federal Pell Grant will know which ISIR
is the valid one), and the requirements related to reporting of verification
records for the Federal Pell Grant Program make this choice necessary.
The Secretary is aware that there may be a few situations in which a student
is attending more than one institution under a written agreement. However,
based on these factors, in the very limited circumstances in which different
institutions would choose to administer and disburse funds from different
title IV, HEA programs, the regulations under this section appropriately
mandate that the institution that chooses to disburse Federal Pell Grant
Program funds must also disburse the ACG and National SMART Grant funds.
Changes: None.
Section 691.12 Application
Comments: Several
commenters recommended that the 2007-2008 Free Application for Federal
Student Aid (FAFSA) should request the information for a student to self-identify
that he or she has successfully completed a rigorous secondary school
program of study as provided for in Sec. 691.12(b)(2).
Discussion: The Secretary agrees that this information should be included
on the FAFSA to the extent practicable. The 2007--2008 electronic FAFSA
form (FAFSA on the Web) collects this information, and students are able
to provide the necessary information as a part of the application. More
than 90 percent of all students apply electronically using FAFSA on the
Web or through their institutions. The small minority of applicants using
a paper FAFSA currently receive notification by mail or, if an e-mail
address is provided, an e-mail that the student may call a toll-free telephone
number or go to a web site to provide the necessary information. The 2007-2008
FAFSA has already been approved by OMB under the Paperwork Reduction Act,
but we will consider future improvements to the paper FAFSA during the
next clearance cycle.
Changes: None.
Comments: Two commenters recommended that the regulations clarify that
an institution has the authority to request additional application information,
similar to the Secretary's authority.
Discussion: Under section 483(a) of the HEA only the Secretary has the
authority to require a student to provide information concerning the student's
need and eligibility for the title IV, HEA programs, and the Secretary
is required to collect the student's information on the FAFSA. Institutions
may not use any additional application data collection beyond the FAFSA
to determine a student's title IV eligibility. However, an institution
does have the authority under 34 CFR 668.16(f) and 668.54(a)(3) of the
Student Assistance General Provisions to require a student to provide
any information or documentation necessary to resolve any concerns regarding
a student's eligibility or application information as well as the authority
to require documentation directly from a cognizant authority regarding
the completion of a rigorous secondary school program of study under Sec.
691.15(b)(2)(ii). The Secretary does not believe that these authorities
need to be repeated in Sec. 691.12.
Changes: None.
Comments: One commenter recommended that all application requirements
appear only in the Federal Pell Grant regulations to eliminate the possibility
of conflicting language.
Discussion: Section 691.12, while similar to the Federal Pell Grant Program
regulations when possible, does include provisions specific only to the
ACG and National SMART Grant programs. The Secretary believes that regulations
specific to the ACG and National SMART Grant programs should not be included
in the Federal Pell Grant Program regulations, as it may cause confusion.
Changes: None.
Section 691.15 Eligibility
To Receive a Grant
Citizenship
Comments: Several commenters objected to the requirement that students
must be U.S. citizens in order to qualify for an ACG or National SMART
Grant. One commenter stated that preventing permanent residents from receiving
a National SMART Grant excludes from consideration more than twenty percent
of Federal Pell Grant recipients who are majoring in the National SMART
Grant fields of study.
Discussion: Section 401A(c)(1) of the HEA specifies that only U.S. citizens
are eligible for ACG and National SMART Grants. The Secretary does not
have the authority to change this requirement through regulations.
Changes: None.
Federal Pell Grant Eligibility
Comments: A number of commenters objected to the requirement that an eligible
student must be receiving a Federal Pell Grant disbursement for the same
payment period in which he or she will receive the ACG or National SMART
Grant. They stated that the statute only requires that a student be eligible
for a Federal Pell Grant, not receiving a Federal Pell Grant for the same
payment period. These commenters believed that the Secretary exceeded
her statutory authority and arbitrarily denied a Federal entitlement to
otherwise eligible students. The commenters were especially concerned
about eligibility for payment periods that cross award years, pointing
out that there are various situations in which students who attend college
year-round may have exhausted their Federal Pell Grant eligibility yet
still have remaining eligibility for an ACG or National SMART Grant. For
these Pell-eligible students who have already received a full scheduled
Federal Pell Grant award, the receipt of an ACG or National SMART Grant
may be of critical importance. In addition, some students attending low-cost
institutions may have substantial outside scholarship assistance that
reduces their need and resultant ACG or National SMART Grant during the
regular fall through spring academic calendar, but may have unmet need
during the summer term. Some commenters suggested that it would be more
reasonable to define Federal Pell Grant eligibility for this purpose in
terms of an expected family contribution (EFC) within the range for a
Federal Pell Grant award for the award year in which the payment period
is placed.
Discussion: The Secretary agrees with the commenters that students should
not have to receive a Federal Pell Grant during the same payment period
to be eligible for an ACG or National SMART Grant. Rather, students who
would otherwise be eligible for an ACG or National SMART Grant award but
have already exhausted their Federal Pell Grant eligibility for the award
year should be eligible to receive an ACG or National SMART Grant award
as long as they received a Federal Pell Grant in the same award year.
Change: Section 691.15(a)(2) has been revised to require that a student
receive a Federal Pell Grant in the same award year, rather than the same
payment period, to be eligible for an ACG or National SMART Grant. The
Secretary has made conforming changes in Sec. 691.65(a)(2) and 691.80(a)
to reflect this change in the ACG and National SMART Grant student eligibility
requirements. In addition, the Secretary has also made conforming changes
to Subpart E of the Student Assistance General Provisions on verification
of student aid application information by amending 34 CFR 668.51, 668.52,
668.54, 668.55, 668.58, 668.59, 668.60, and 668.61. These changes are
necessary to clarify that these sections apply to the ACG and National
SMART Grant programs to ensure the synchronous administration of these
programs.
Full-Time Enrollment
Comments: One commenter expressed concern that the ACG and National SMART
Grant regulations do not serve nontraditional students. The commenter
believed that assistance from these programs should be available to students
who enroll less than full-time.
Discussion: Section 401A(c) of the HEA requires that a student must be
enrolled full-time in order to be eligible to receive assistance under
the ACG and National SMART Grant programs. The Secretary does not have
the authority to change this requirement through regulations.
Changes: None.
Rigorous Secondary School Program of Study Eligibility
Comments: One commenter asked whether a student who has completed his
or her secondary school coursework in December but who graduated after
January 1, 2005, or 2006, is eligible for an ACG. Another commenter was
concerned that students who are not of traditional college age would not
be eligible for an ACG.
Discussion: The requirement that a student have successfully completed
a rigorous secondary school program of study after January 1, 2006, for
a first-year student and after January 1, 2005, for a second-year student
in order to receive an ACG is in section 401A(c)(3) of the HEA. The Secretary
interprets the statute as requiring a student to have graduated in order
to complete a rigorous secondary school program of study. For example,
if a student completed the coursework of a rigorous secondary school program
in December 2005, but actually graduated from the program after January
1, 2006, the student is eligible to receive a first year ACG. Although
in the early years of the ACG program eligible students will be of traditional
college age, as time goes by, students who are not of traditional college
age may establish eligibility provided they have completed a rigorous
secondary school program of study after the dates provided in the statute.
Changes: None.
Grade Point Average
Comments: Several commenters claimed that how and when to compute a cumulative
GPA is confusing. One commenter wanted clarification on whether GPA for
the student's eligible program meant cumulative GPA, major GPA, or something
else. This commenter suggested removing the reference to eligible program
if the Secretary intended a cumulative GPA computation. Some commenters
supported the Secretary's interpretation of the GPA calculation for National
SMART Grant eligibility in Sec. 691.15(c)(3). One commenter pointed out
that, for National SMART Grants, the Secretary did not follow the language
from section 401A(c)(3)(C)(ii) of the HEA, which provides that GPA is
determined in the coursework required for the major, but instead required
GPA to be determined for the coursework required for a student's eligible
program. The commenter supported the burden reduction in this case, but
objected to the regulatory approach. Another commenter believed that the
GPA for ACGs should be defined the same way it is for National SMART Grants.
Yet another commenter indicated that, for National SMART Grants, institutions
should have the flexibility to review academic major and GPA no more frequently
than is required by institutions to monitor students under their Satisfactory
Academic Progress (SAP) policy, so as to align these two academically
related monitoring policies.
Discussion: As discussed in the preamble to the interim final regulations,
the Secretary believes that a student's GPA for purposes of eligibility
for the ACG and National SMART Grant programs should be calculated using
the same standards that are used to calculate GPA for other academic and
title IV purposes at the institution. The Secretary does not believe scores
on tests in AP, IB, or College Level Examination (CLEP) programs should
be converted to grades for any purpose under the ACG or National SMART
Grant programs. For National SMART Grants in particular, the Secretary
believes that the student must meet the GPA requirement based on all courses
required for the student's eligible program, not just those required for
the eligible major. The Secretary believes this approach is appropriate
because it minimizes institutional burden when determining whether a student
meets the GPA requirement and is in accord with other title IV, HEA program
requirements related to GPAs. GPA cannot be computed the same way for
the ACG Program as it is for the National SMART Grant Program because
section 401A(c)(3) of the HEA requires a student to meet the necessary
GPA only at the end of the student's first academic year for an ACG, but
throughout the student's third and fourth academic years for a National
SMART Grant.
The Secretary believes that the monitoring requirements for SAP would
not be adequate to determine eligibility for an ACG or National SMART
Grant based on cumulative GPA. Under Sec. 668.32(f), although a student
may be making satisfactory progress according to the institution's published
SAP standards under Sec. 668.16(e), and if applicable, under Sec. 668.34,
these standards allow a student to maintain a GPA below the 3.0 (on a
4.0 scale) GPA required to be eligible for an ACG or National SMART Grant.
In addition, Sec. 668.16(e)(4) provides that an institution must determine
whether a student is making satisfactory progress at the end of each increment,
which must not exceed the lesser of one academic year or one-half the
published length of the program. In contrast, section 401A(c)(3)(C)(ii)
of the HEA requires that a student meet the GPA requirement throughout
the student's third and fourth academic year. Review of a student's GPA
under the standards set forth in Sec. 668.16(e) would not ensure that
a student is meeting the requirements of the National SMART Grant Program.
Changes: None.
Transfer Student
GPA
Comments: We received several comments related to the GPA of transfer
students. One commenter supported the Secretary's interpretation for transfer
GPA calculations. Another commenter asked for clarification on how to
treat GPA in the case of transfer students who are admitted for summer
and then take a 3-credit summer course. Three commenters requested an
option to use the GPA earned at prior colleges as the indicator of sufficient
academic performance for payment for the first term at the new college
to determine eligibility for an ACG or National SMART Grant because, at
many colleges, it would require a significant reengineering of the business
process to calculate a GPA based solely on courses accepted toward the
program.
The commenters believed that cumulative GPA from other institutions should
sufficiently demonstrate academic achievement. Another commenter questioned
the fairness of the transfer hours GPA policy. The commenter was concerned
that students who do poorly at the first institution could transfer to
gain ACG or National SMART Grant eligibility, because only the hours accepted
by the new institution would be considered and all poor grades excluded.
The student who does poorly and stays at the first institution would not
be eligible, but the student who transfers could be.
Discussion: The interim final regulations explain that, in the case of
a transfer student, for the first payment period, institutions must rely
on the grades of the courses from the prior institution accepted toward
the student's eligible program. Transfer credits that were awarded through
programs such as AP, IB, or CLEP programs should not be converted to grades
to determine a student's GPA for purposes of eligibility for an ACG or
National SMART Grant in the student's initial payment period after transferring.
Once a student has the grades for a payment period at the new institution
for coursework taken toward the eligible program, the institution may
use the GPA calculated from those grades only, unless there is an institutional
policy that a student's GPA at the new institution include transfer grades.
While the Secretary agrees that cumulative GPA from a prior institution
does serve as an academic performance indicator, the purpose of calculating
GPA based solely on coursework accepted toward the eligible program is
to ensure student eligibility for the ACG or National SMART Grant programs.
Because this GPA calculation is used solely to determine a student's eligibility
under these programs for the initial payment period of enrollment, there
is no intrusion into institutional grading policy by the Secretary. Finally,
the Secretary believes that the transfer hours GPA requirement in Sec.
691.15(d) of the interim final regulations is an equitable means of establishing
a transfer student's eligibility.
Students who perform poorly overall will likely still transfer in a GPA
that is below 3.0. Thus, these students would not be significantly more
likely to receive a grant than a student who did poorly but stayed at
the same institution.
Changes: None.
Comments: One commenter asked the Secretary to clarify whether an institution
is required to follow its standards for academic and title IV, HEA program
purposes to determine a transfer student's GPA once it has established
eligibility using grades in coursework that the institution accepts for
the student's first payment period. For example, if an institution normally
does not use grades on transferred credit for SAP or other purposes, does
the institution have the option of using such grades for ACG and National
SMART Grant recipients only?
Discussion: An institution's policies for the administration of the title
IV, HEA programs generally must be the same for all title IV, HEA programs.
An institution may not establish a SAP policy that treats grades on transferred
credits one way for ACG and National SMART Grant recipients, but another way for recipients of other title IV aid.
Changes: None.
Prior Enrollment in a Postsecondary Educational Program
Comments: Several commenters believed that students who attended postsecondary
programs while completing high school should be considered first-year
students for ACG eligibility purposes. Two commenters noted that some
colleges offer the opportunity for a high school student to earn an associate's
degree while completing high school. One commenter stated that it was
possible for some of these students to enroll in college programs that
only accept some of the credits the student has earned while in high school
and, given the institution's definition of an academic year, the student
may qualify as a first-year student. The commenter believed that, if the
institution was treating the student as a first-year student, the student
should be eligible for a first-year ACG.
One commenter asked the Secretary to clarify whether a student who attended
a postsecondary institution as part of a State-recognized dual-enrollment
program is considered to have been enrolled as a regular student for purposes
of determining prior enrollment. A few commenters asked for clarification
of the Secretary's policy on prior enrollment. One commenter requested
clarification as to whether a student who earned an associate's degree
at the same time as he or she earned a high school diploma would be eligible
for a second-year ACG, provided the transfer credits were less than what
would be required to establish the student as a junior. The commenter
also wanted to know if the same student would be eligible for a first-year
ACG if he or she did not earn the associate's degree, and the transfer
credits were less than what would be required to establish the student
as a sophomore.
Several commenters believed these final regulations should reflect guidance
from the Department that prior enrollment in an undergraduate program
after completion of high school would not affect a student's first year
eligibility for an ACG and asked the Secretary to specify an effective
date for this guidance.
Discussion: The Secretary agrees that the regulations should be clarified
to reflect that only enrollment as a regular student in an eligible program
while in secondary school disqualifies a student from receiving a first-year
ACG in the student's first academic year of postsecondary education. Under
the Department's interpretation of section 401A(c)(3)(A), the term ``previously''
in the phrase ``previously enrolled in a program of undergraduate education''
in section 401A(c)(3)(A)(ii) relates to completion of a rigorous secondary
school program of study in section 401A(c)(3)(A)(i).
A student is considered to have been previously enrolled in an eligible
program if the student was admitted into that program as a regular student
while still enrolled in a secondary school program of study. A regular
student is a person who is enrolled or accepted for enrollment at a postsecondary
educational institution for the purpose of obtaining a degree, certificate,
or other recognized postsecondary educational credential offered by that
institution. Therefore, a high school student who was enrolled in a dual-enrollment
program with the purpose of obtaining an associate's degree is considered
to have been enrolled as a regular student, whether the student actually
earned the associate's degree or not. Thus, the student was previously
enrolled in an eligible program of undergraduate education and is not
eligible for a first-year
ACG. Such a student may be eligible for a second-year ACG if his or her
transfer credits were less than what would be required to establish the
student as enrolled for the student's third title IV, HEA academic year.
However, if an otherwise eligible student took courses that were part
of an associate's degree program, but was not enrolled for the purpose
of obtaining the associate's degree (i.e., was not a regular student),
the student would be eligible for a first-year ACG.
Changes: Section 691.15(b)(1)(ii)(B) has been revised to clarify that
a student is not eligible for a first-year ACG if the student was previously
enrolled as a regular student in an eligible program while still enrolled
in a secondary school program of study.
Documenting Completion of a Rigorous Secondary School Program of Study
Comments: Many commenters expressed concern that the requirements for
determining and documenting a student's completion of a rigorous secondary
school program of study are too onerous. Several commenters asserted that
it is unduly burdensome for institutions to determine by means of a postgraduation
high school transcript whether a student has met the definition of a rigorous
secondary school program of study under Sec. 691.16(d). Commenters noted
that this requirement will be a substantial new undertaking for institutions
and they will have to come up with the resources or processes to comply.
Several commenters noted that many community colleges do not collect high
school transcripts as part of their admissions process; instead, they
use testing to determine readiness. Other commenters noted that the transcripts
they are evaluating for ACGs reflect only six or seven semesters of high
school coursework. These commenters were concerned that there would be
a problem with the timing of admissions decisions and initial financial
aid package offers, which occur in the winter or spring prior to enrollment
in the fall, because there may be uncertainty about whether a student
would complete a rigorous secondary school program of study. The commenters
proposed several options to ameliorate the burden of documenting completion
of a rigorous secondary school program of study. The commenters suggested
adding an option for defining a rigorous secondary school program of study
that could be applied at the midpoint of a student's final year in high
school, noting that this option would provide greater assurance that the
initial financial aid award package for the student would materialize
for the student when the final high school transcripts are reviewed and
also would provide some measure of administrative ease for colleges when
evaluating the final secondary school transcripts. One commenter noted
that, in the few cases when the student substantially deviates from the
level of academic achievement on the partial transcript, institutions
could withdraw the admissions offer. In addition, one commenter suggested
adding an option to define a rigorous secondary school program of study
as a total of 16 subject years of study within the five defined subject
areas. The commenter noted that this definition would reflect a higher
subject year count than the current minimum course requirements and a
broader curriculum than the AP and IB option demonstrates by requiring
certain scores in only two courses.
The commenter believed that this alternative would be acceptable if coupled
with confirmation of graduation and successful completion of senior year
courses. Similarly, one commenter asked that an institution whose academic
policy required the same coursework from all admitted students that the
Secretary requires for rigorous secondary school programs of study under
Sec. 691.16(d) be permitted to assume that an otherwise-eligible student
had completed a rigorous secondary school
program of study, without requiring the institution to retrieve and review
every transcript.
One commenter requested clarification as to whether there is a minimum
score required for rigorous programs like AP and, if so, whether it is
the minimum required by, for example, the institution or the State. Finally,
one commenter asked for clarification as to whether it is necessary to
have documentation such as for AP scores in the Financial Aid office or
if maintaining documentation at the Admissions or Registrar's Office would
be acceptable.
Discussion: The Secretary believes the current regulations appropriately
balance statutory requirements with institutional burdens raised by commenters.
While the Secretary agrees that there is a concern with respect to the
timing of the availability of complete high school transcripts and admissions
and financial aid package offers for first-year ACGs, section 401A(c)(3)(A)(i)
and (c)(3)(B)(i) of the HEA requires a student to complete, and graduate
from, a rigorous secondary school program of study in order to be eligible
for an ACG. The Secretary believes that a rigorous secondary school program
of study continues through a student's fourth year of high school. Institutions
do not always withdraw admissions offers when a student's final high school
transcript differs significantly from the partial transcript. In the case
of an ACG, the purpose of the transcript is to document the completion
of a rigorous secondary school program of study. The Secretary does not
regulate the admissions standards of postsecondary institutions. When
a student substantially deviates from the level of academic achievement
on the partial transcript, the Secretary cannot regulate to require institutions
to withdraw their admissions offers. The Secretary's concern, for purposes
of awarding an ACG, would be that the transcript documented the student's
completion of a rigorous secondary school program of study.
While institutions are responsible for maintaining documentation at the
institution, no specific location is required. If an institution requires
the same coursework that the Secretary requires for a rigorous secondary
school program of study from an admitted student, and the financial aid
office is certain that the transcript or equivalent document confirming
completion of a rigorous secondary school program of study is kept at
the admissions office or some other part of the institution, it could
assume a student met the rigorous secondary school program of study criterion.
Finally, it should be noted that the minimum scores for AP exams were
published in Sec. 691.16(d)(5) of the interim final regulations.
Changes: None.
Declaring an Eligible Major
Comments: One commenter believed that the Federal Government should not
insert itself into the process of determining when a student declares
a major as this action usurps an institution's rerogative to establish
its own academic requirements. Another commenter requested clarification
on how to document intent to declare an eligible major and how to determine
when a student is no longer displaying an intent to declare an eligible
major. One commenter suggested that, when an institution's academic requirements
do not allow a student to declare an eligible major in time to qualify
for a National SMART Grant, the student should be allowed to meet the
declaration of eligible major requirement by enrolling in the courses
deemed by the institution to be consistent with fulfilling the requirements
of an intended eligible major and declaring an intention to complete
a major in an eligible field of study.
Discussion: The Secretary does not agree that the regulations intrude
on an institution's prerogative to establish its own academic requirements.
In addition, the Secretary believes that documentation of intent to declare
an eligible major should be determined by institutional policy. The regulations
permit a student to fulfill the requirement that he or she declare an
eligible major by enrolling in the courses deemed by the institution to
be consistent with fulfilling the requirements of an intended eligible
major and declaring an intention to complete a major in an eligible field
of study if that is the institutional policy.
Changes: None.
Section 691.16 Recognition
of a Rigorous Secondary School Program of Study
Comments: A few
commenters supported the multiple options for demonstrating completion
of a rigorous secondary school program of study, while other commenters
believed that additional secondary school programs of study should be
recognized as rigorous. One commenter believed that the recognized State
secondary school programs of study should be the single standard for a
rigorous secondary school program of study, as it would greatly reduce
the administrative burden for institutions. A few commenters believed
tht the minimum course requirements in Sec. 691.16(d)(2) are too strict
and would unfairly eliminate from eligibility students who should be eligible
for an ACG. Two commenters believed that some students who meet their
admissions requirements but who do not or cannot take the required courses
in high school should not be eliminated from eligibility. For example,
one commenter noted that advanced students who reduce their high school
classes, such as English, during their last year of high school to take
college classes may not qualify, even though their secondary school programs
of study were quite rigorous. Another commenter gave the example of a
student who otherwise qualified as a student who had completed a rigorous
secondary school program of study, but who attended a high school that
did not offer physics.
One commenter believed that the Secretary should ensure that all approved
State programs use wording consistent with the minimum course requirements
under Sec. 691.16(d)(2) to the extent possible so that institutions will
know that differences are not just semantic. For example, the commenter
questioned whether a particular State standard requiring three years of
math (at the algebra I level or higher) is intended to be different from
the Federal standard requiring three years of math (including algebra
I and a higher level course such as algebra II, geometry, or data analysis
and statistics). A few commenters were concerned with the lack of uniformity
in secondary school course descriptions, noting that States often combine
courses into one general course; such as combining algebra I and geometry
into a math I course offered over two academic years. The commenters believed
that it is unreasonable to expect an institution to be familiar with the
graduation requirements for all school districts in order to determine
whether a student's courses meet the definition of a rigorous secondary
school program of study. One commenter believed that the rigorous secondary
school programs of study established by States and recognized by the Secretary
should not be revised annually as significant changes would create confusion
for students and undue burden for institutions.
Discussion: Section 401A(f) of the HEA requires the Secretary to recognize
at least one rigorous secondary school program of study in each State.
As there is no statutory requirement for States to submit programs for
recognition, the Secretary believed it was necessary to develop additional
options for completion of a rigorous secondary school program of study
that would ensure that students in each State have the opportunity to
qualify for an ACG. The Secretary believes that the breadth of the options
provides the vast majority of students for whom this grant program was
intended with sufficient means to demonstrate eligibility for an ACG.
To the extent that these options do not provide sufficient means to demonstrate
eligibility, the Secretary encourages individuals, high schools, and postsecondary
institutions to work together with States so that States may submit additional
or revised programs for recognition. As for an advanced student who reduces
his or her high school classes to take college classes, the Secretary
reminds commenters that completion of college courses that meet the minimum
course requirements for a rigorous secondary school program of study count
toward completion of a rigorous secondary school program of study if they
are accepted toward the student's high school diploma.
The Secretary understands the commenters' concerns with inconsistent wording
in State programs and a lack of clarity of course descriptions. However,
the Secretary does not believe that it is appropriate to establish a national
standard for the wording of State submissions of rigorous secondary school
programs of study or course descriptions and recommends that concerns
with consistency of wording be taken up with States and secondary schools.
The Secretary believes it is imperative that there be an annual opportunity
for States to submit changes to their rigorous programs of study because,
to the extent that these changes result in a more rigorous program of
study, students from that State graduating in that year would be held
to the new standard when applying for an ACG. If, however, these changes
result in a less rigorous program of study, the Secretary may deny recognition
if the Secretary determines the level of rigor has fallen below the HEA's
intended level.
Changes: None.
Comments: A few commenters questioned whether coursework taken prior to
high school counts toward the minimum course requirements under Sec. 691.16(d)(2).
Specifically, one commenter asked whether a student who is otherwise eligible
under Sec. 691.16(d)(2), and who took a foreign language in 8th grade
but did not take one later is eligible for an ACG. Another commenter noted
that many students take algebra I prior to high school; therefore, it
does not appear on the student's high school transcript. The commenter
asked the Secretary to clarify under what circumstances such a student
can be considered to have completed algebra I for the minimum mathematics
course requirements under Sec. 691.16(d)(2). In particular, the commenter
wanted to know if an institution may assume that a student has completed
algebra I if it is not included on the transcript, but geometry, algebra
II, or calculus are included.
Discussion: If a student completed the secondary school curriculum in
a school system in which the high school does not include other secondary
school grades, e.g., the high school does not include grade eight or nine,
institutions should use their normal processes for determining whether
coursework completed in earlier grades is included. However, an institution
may make certain assumptions, as appropriate, based on its knowledge of
a school system's curriculum. For example, if a high school transcript
covering only grades 10-12 shows completion of three years of English,
the institution may assume that the student completed a year of English
in the ninth grade.
[[Page 64411]]
Changes: None.
Comments: One commenter recommended that the minimum science course requirements
in Sec. 691.16(d)(2) be changed to recognize other challenging science
coursework. The commenter believed that a student who completed physical
science in ninth grade, biology in tenth grade, environmental science
in eleventh grade and anatomy and physiology in twelfth grade should be
considered to have met the minimum science course requirement.
Discussion: The Secretary believes that the minimum coursework requirements
in the regulation are appropriate. These standards are patterned after
the recommendations for the essentials of a strong curriculum in the National
Commission on Excellence in Education's report, A Nation at Risk: The
Imperative for Educational Reform available on the Department's Web site
at http://www.ed.gov/pubs/NatAtRisk/index.html.
As previously noted, to the extent that these options
do not provide sufficient means to demonstrate eligibility, the Secretary
encourages individuals, high schools, and postsecondary institutions to
work together with States so that States may submit additional or revised
programs for recognition.
Changes: None.
Comments: One commenter recommended that an exception be made to the foreign
language course requirement under Sec. 691.16(d)(2) for students with
physical limitations such as hearing loss. The commenter noted that, because
of language deficits that accompany hearing loss, most deaf students do
not take languages other than English as a part of their secondary programs,
and few schools for the deaf require or encourage foreign language as
a part of their curriculum. The commenter added that even if American
Sign Language (ASL) meets the definition of a foreign language, most deaf
students are already ASL users and do not need to study it in secondary
school.
Discussion: While the Secretary understands the concerns raised by the
commenters, she believes that a change to this requirement is unnecessary.
The Secretary considers one year of ASL to meet the requirement of one
year of a language other than English necessary to meet the minimum course
requirements under Sec. 691.16(d)(2). Also, as stated previously, the
Secretary believed it was necessary to develop additional options for
completion of a rigorous secondary school program of study that would
ensure that students in States that did not submit programs for recognition
have the opportunity to qualify for an ACG. The Secretary believes that
the breadth of the options, including participation in honors programs
established by States or completion of AB or IB courses and the earning
of a minimum score on the exams for those courses, provides the vast majority
of students for whom this grant program was intended with sufficient means
to demonstrate eligibility for the ACG.
Changes: None.
Comments: One commenter questioned whether students attending an institution
with a ``bridging year'' program and completing their senior year of high
school at the postsecondary institution would be eligible for a second
year ACG if they do not receive a high school diploma, but instead earn
a General Education Development (GED) certificate. One commenter believed
that the department was interpreting the regulations to mean that a student
who obtains a GED is automatically ineligible for an ACG or National SMART
Grant simply because he or she has obtained a GED. The commenter noted
that some home-schooled students, who otherwise qualify as having completed
a rigorous secondary school program of study, are advised to take the
GED
to meet college admission requirements. The commenter asked the Department
to make clear that such students who obtain the GED are not automatically
ineligible.
Discussion: A student who obtained a GED is not automatically ineligible
for an ACG or National SMART Grant. However, a student who obtains a GED
in lieu of a high school diploma cannot use the GED, alone, to demonstrate
completion of a rigorous secondary school program of study. The Department
believes that completion of a GED program alone does not demonstrate the
academic achievement of a rigorous secondary school program of study.
Such a student can nonetheless
qualify for an ACG with a GED by completing one of the rigorous secondary
school programs of study recognized under Sec. 691.16.
Changes: None.
Comments: Two commenters asked the Department to clarify which level of
IB examination, standard or higher, a student must take to qualify for
an ACG. One commenter believed that the regulations confuse the IB Diploma
program with a stand-alone IB course. The commenter believed that the
regulations should be changed to make clear that a student is considered
to have completed a rigorous secondary school program of study if he or
she completes and achieves the required
minimum score for the exam on at least two IB courses, whether or not
they are part of an IB Diploma Program.
Discussion: A score of ``4'' or higher on either the standard level or
higher level IB examination for at least two IB courses meets the exam
portion of the IB standard for completion of a rigorous secondary school
program of study. The Secretary agrees that a student who completes and
achieves the required minimum score for the exam on at least two IB courses,
whether or not they are part of an IB Diploma Program, should be considered
to have completed a rigorous secondary
school program of study.
Changes: Section 691.16(d)(4) has been changed to clarify that a student
who completes and achieves the required minimum score for the exam on
at least two IB courses, whether or not they are part of an IB Diploma
Program, is considered to have completed a rigorous secondary school program
of study.
Comments: One commenter believed that high scores on standardized achievement
tests, such as the SAT and ACT, should be recognized as a rigorous secondary
school program of study. The commenters believed that this recognition
would be consistent with the inclusion of completion of IB or AP courses
with high test scores as rigorous programs because they establish that
a student has attained a level of ability in completing his or her secondary
school program that is commensurate with completing a rigorous secondary
school program of study. The commenter believed that this proposal would
reduce burden on institutions, as these test scores are readily accessible.
The commenter believed that States and test owners could work together
to determine the qualifying test score.
Discussion: The Secretary does not agree that high scores on standardized
achievement tests should be recognized as a rigorous secondary school
program of study. Unlike the IB and AP tests, there are no specific courses
or curriculum that correspond to the standard achievement tests. The Secretary
believes that both components are necessary to demonstrate that a student
has successfully completed a rigorous secondary school program of study.
Changes: None.
Section 691.17 Determination
of Eligible Majors
Comments: Several
commenters whose institutions do not offer programs in the eligible majors
were concerned that their institutions were excluded from the National
SMART Grant Program. In one case, the institution offered majors with
concentrations in the eligible fields. The commenter requested clarification
on whether students in these types of programs would be eligible. In another
case, the institution offered intensive instruction in math and science
as part of a liberal arts degree. Two commenters from this institution
requested that this institution be included among eligible institutions
and one of these commenters also requested an alternative means for students
whose
institution does not offer eligible majors to qualify.
Discussion: Section 401A(c)(3)(C) of the HEA requires a student to pursue
a major in the physical, life, or computer sciences, mathematics, technology,
or engineering (as determined by the Secretary pursuant to regulations);
or a critical foreign language in order to be eligible for a National
SMART Grant. No alternative categories of majors are indicated in the
HEA, and the Secretary does not have the authority to provide alternative
categories through regulations in those cases where ineligible majors
include concentrations in eligible fields or where liberal arts degrees
do not provide eligible majors but do include some intensive instruction
in eligible fields.
Changes: None.
Comments: Several commenters addressed the determination of eligible majors.
One commenter expressed concern that a number of scientific fields were
omitted and that the eligible languages were too narrowly identified for
purposes of available undergraduate majors. Another commenter was concerned
that Evolutionary Biology was omitted from the eligible majors list. One
commenter was concerned that teaching degrees in the science and math
fields were not included in the list of eligible majors. Another commenter
suggested taking a more thorough look at the majors, especially in areas
of national need, such as nursing and public health. Yet another commenter
was concerned about the consultation process and thought that the Department
should consult directly with organizations such as the National Academy
of Sciences and other professional scientific organization to receive
input on the determination of eligible majors.
One commenter recommended that, if the Department was unable to supply
the list of eligible majors by February 1 preceding the academic year
for which determinations of eligibility must be made, the Department should
permit an institution to use the current list for first-time determinations
of National SMART Grant eligibility. One commenter requested clarification
on whether a student would still be eligible for a National SMART Grant
if that student's major is removed from the list of approved majors at
any time subsequent to the student's first National SMART Grant payment,
when the student's payment was based on the student's intent to declare
an eligible major as described in Sec. 691.15(c)(2)(i)(B). Finally, one
commenter requested clarification on an institution's responsibility to
ensure that qualifying majors are being actively pursued.
Discussion: Section 401A(c)(3)(C) of the HEA specifies that a student
must pursue a major in the physical, life, or computer sciences, mathematics,
technology, or engineering (as determined by the Secretary pursuant to
regulations); or a critical foreign language in order to be eligible for
a National SMART Grant. Evolutionary Biology was omitted from the original
list of eligible majors in error; a revised list including this major
and Exercise Physiology, which was also omitted in error, has been posted.
The list of eligible majors will be reviewed annually; however, section
401A(c)(3)(C)(i)(II) of the HEA only requires consultation on the list
of critical foreign languages with the Director of National Intelligence.
The current list of critical foreign languages was developed in consultation
with the Director of National Intelligence as required.
The Secretary will continue to identify a list of eligible majors, including
critical foreign languages, annually for an award year to ensure that
the most current information is used and will publish the list in time
for institutions to plan awards accordingly. Because a student's intent
to declare an eligible major as described in Sec. 691.15(c)(2)(i)(B) serves
as a proxy for actually declaring an eligible major until the declaration
is permitted by an institution, under Sec. 691.17(c) a student would still
be eligible if a student's major is removed from the list of approved
majors at any time subsequent to the student's first National SMART Grant
payment, when the student's payment was based on the student's intent
to declare an eligible major as described in Sec. 691.15(c)(2)(i)(B) as
well as when the student's payment was based on a declared eligible major
under Sec. 691.15(c)(2)(i)(A). Finally, it is the institution's responsibility
to ensure that qualifying majors are being actively pursued. The institution
is responsible for ensuring this active pursuit of eligible majors and
may use any institutional process that it chooses to document this intent.
Changes: None.
Section 691.61 Submission
Process and Deadline for a Student Aid Report or Institutional Student
Information Record
Comments: One commenter
noted that Sec. 691.61(b) cross-referenced Sec. Sec. 668.60 and 668.164
and that conforming changes were made to Sec. 668.164, but that Sec. 668.60
was not amended to include the ACG and National SMART Grant programs.
Therefore, the commenter stated that it is unclear which provisions of
Sec. 668.60 apply to the ACG and National SMART Grant programs.
Discussion: The Secretary agrees that the requirements in Sec. 668.60
that apply to the ACG and National SMART Grant programs need clarification.
Changes: Section 668.60 is revised to clarify how it applies to the ACG
and National SMART Grant programs.
Comments: One commenter stated that Sec. 691.61(a) appears to place the
responsibility on institutions to review the record of all FAFSA filers
to identify eligible students rather than just those FAFSA filers identified
by the Secretary as potentially eligible students. The commenter suggested
that the institution should be allowed to rely on information on the Student
Aid Report (SAR) or ISIR as to whether the student is potentially eligible
to receive an ACG or National SMART Grant. That is, if the student's SAR
or ISIR does not indicate that the student is potentially eligible to
receive an ACG or National SMART Grant, the institution would not be required
to check its own records or take any other action to determine whether
the student is potentially eligible. Rather, the institution could assume
that the student is not eligible for the ACG or National SMART Grant and
take no further action.
Discussion: To implement the ACG Program, the Secretary has instituted
procedures for students to self-identify that they have completed a rigorous
secondary school program of study and institutions, at their option, may
generally rely on this self-identification process. Most potentially eligible
students will have had an opportunity to self-identify through the FAFSA
(application) process on this matter and will have a positive indication
on their SAR or ISIR with regard to completion of a rigorous secondary
school program of study. Under Sec. 691.61, an institution is allowed
to rely on the information on a student's SAR or ISIR as to whether the
student is potentially eligible for an ACG, unless the institution has
information
from another source indicating that the student is potentially eligible.
For example, if a student whose SAR or ISIR does not indicate potential
eligibility for the ACG (because the student has not yet self-certified
as to his or her completion of a rigorous secondary school program of
study) informs the institution that he or she has completed such a secondary
school program of study, and is thus potentially eligible for the ACG,
then the institution must follow up on that information and determine
whether the student is eligible for the ACG.
Outside of the eligibility requirements common to both the ACG and the
National SMART Grant programs found in Sec. 691.15(a), i.e., the general
eligibility requirements from 34 CFR part 668, subpart C; U.S. citizenship;
receiving a Federal Pell Grant; and being enrolled full-time, the primary
eligibility requirements for receipt of a National SMART Grant relate
to pursuit of an eligible major and having the requisite GPA. Information
about these eligibility factors will not be found on the SAR or ISIR.
Thus, for the National SMART Grant Program, there is not the same issue
of determining eligibility for students who do not have eligibility information
on their SAR or ISIR as there is for the ACG Program. However, it should
be noted that an institution does have to determine whether its students
meet the eligibility requirements for the National SMART Grant Program,
including which of its students are in eligible majors, and award those
students, if otherwise eligible, a National SMART Grant.
Changes: None.
Section 691.62 Calculation
of a Grant
Ratable Reduction
Comments: Two commenters expressed concern over the potential for ratable
reductions to the awards. One of the commenters inquired as to when award
maximums would be considered final for the year. The other commenter offered
multiple suggestions for avoiding ratable reductions.
Discussion: Section 401A(d)(1)(B)(ii) of the HEA requires the Secretary
to ratably reduce the maximum grant amounts for both programs when the
funds available for a given award year are less than the amount needed
to fund full awards for all eligible students. The Secretary establishes
the ACG and National SMART Grant Scheduled Awards based on the availability
of funds appropriated and the anticipated number of eligible students.
Scheduled Awards for the ACG and National SMART Grant programs will be
announced annually in conjunction with the announcement of Scheduled Award
amounts for the Federal Pell Grant Program. Historically, these announcements
have occurred between December and February prior to the beginning of
the award year.
The Secretary uses multiple data sources to best predict the number of
eligible recipients for the ACG and National SMART Grant programs and
will monitor disbursements from both programs based on current year reports
received from postsecondary institutions. Every effort will be made to
avoid ratable reductions. However, if ratable reductions are necessary,
the Secretary will notify the community promptly of the new Scheduled
Awards and the procedures for ratably reducing the ACG and National SMART
Grant awards.
Changes: None.
Packaging
Comments: Several commenters objected to the requirement that the amount
of an ACG or National SMART Grant for an academic year, in combination
with the student's EFC and any other student financial assistance available
to the student, cannot exceed the student's cost of attendance for that
academic year. One commenter suggested that grants from both programs
be awarded, similar to Federal Pell Grants, without regard to either the
student's financial need or the amount of other student financial assistance
received. Another commenter proposed that the grants be allowed to replace
EFC, but not to exceed the student's cost of attendance when combined
with other student financial assistance received.
An additional set of commenters requested that a $300 overaward threshold
be added to the ACG and National SMART Grant programs, similar to the
threshold allowed under Sec. 673.5(d) for the campus-based programs. One
of these commenters also believed that there is confusion over which definition
of estimated financial assistance applies to the ACG and National SMART
Grant programs. Yet another commenter requested that Chapter 31 veterans'
education benefits be
excluded from all definitions of estimated financial assistance.
Discussion: The Secretary believes that the packaging requirement is appropriate.
As noted in the preamble to the interim final regulations, ACGs and National
SMART Grants are need-based grants in that the HEA requires recipients
to be eligible for Federal Pell Grants. Section 471 of the HEA defines
the amount of need of any student as cost of attendance minus EFC minus
estimated financial assistance. Need-based grant assistance cannot replace
a family's expected contribution toward a student's postsecondary expenses.
The overaward threshold allowed under the campus-based programs exists
to assist institutions with the variations of earnings under the Federal
Work-Study program and the estimates institutions must make in projecting
utilization of Federal Perkins Loan and Federal Supplemental Educational
Opportunity Grant funds as well as the bearing of collections on the availability
of funds under the Federal Perkins Loan Program. Because these issues
do not exist for the ACG and National SMART Grant programs, an overaward
threshold is not necessary. Regarding the confusion over which definition
of estimated financial assistance applies to the ACG and National SMART
Grant programs, the Secretary agrees that the differences among the three
definitions can cause confusion. Because the definitions in Sec.682.200(b)
and 685.102(b) have exclusions based on statutory language that does not
apply to the ACG and National SMART Grant programs, we intend to modify
the language in Sec. 691.62(c) to reference the definition of estimated
financial assistance in Sec. 673.5(c).
Chapter 31 veterans' education benefits may not be excluded from the definition
of estimated financial assistance because there is no statutory basis
for exclusion of Chapter 31 benefits. Section 428(a)(2)(C)(ii) authorizes
only Chapter 30 veterans' education benefits and AmeriCorps benefits and
awards to be excluded when determining subsidized loan eligibility. Further,
when determining a student's eligibility for an ACG or National SMART
Grant, an institution may exclude from estimated financial assistance
any portion of a subsidized Federal Stafford Loan that is equal to or
less than the amount of the student's Chapter 30 veterans' education benefits
and AmeriCorps education awards or post-service benefits.
Changes: Section 691.62(c) has been revised to provide that other student
financial assistance is estimated financial assistance as defined in Sec.
673.5(c).
Section 691.63 Calculation
of a Grant for a Payment Period
Comments: One commenter
suggested that the Department review the Federal Pell Grant formulas (and
thus, these formulas in Sec. 691.63) to simplify the payment period calculations.
The commenter also asked the Secretary to consider revising the academic
year definition for clock hour programs from 30 weeks to 26 weeks due
to the change made by the HERA.
Discussion: Given the time constraints associated with the development
of regulations resulting from the enactment of the HERA (especially with
respect to the implementation of the ACG and the National SMART Grant
programs), the Secretary does not believe that it would be prudent to
attempt to change formulas used in the calculation of grants for the Federal
Pell Grant, the ACG, and the National SMART Grant programs at this time.
While such a review and possible revision
of those formulas may prove to be beneficial at a later time, the Secretary
believes that, since the formulas have been used for a long time and are
familiar to the financial aid community, it would be
unwise to revise them now when the aid community already has to deal with
the changes resulting from the HERA.
To reflect the change made by the HERA, a change to the definition of
an academic year for programs offered in clock hours was made in previously
published regulations. Section 668.3 now contains a definition of an academic
year that provides that 26 weeks of instructional time is the minimum
number of weeks of instructional time in an academic year for a clock
hour program, while retaining 30 weeks of instructional time as the minimum
number of weeks of instructional time for a credit hour program. That
definition also retains the provision that, under certain conditions,
the Secretary may approve an academic year with a minimum of 26 weeks
of instructional time for a
credit-hour program.
Changes: None.
Comments: One commenter believed that the determination of enrollment
status is an eligibility criterion and not a factor in the calculation
of the grant payment and that for payments for payment periods calculated
under Sec. 691.63(d), commonly referred to as Formula 3, it would seem
much simpler just to direct the institution to use the same enrollment
status determined for a Federal Pell Grant to determine eligibility for
an ACG or National SMART Grant award. The commenter suggested that a cross-reference
to the Federal Pell Grant Program regulations could be used to determine
a student's enrollment status for an ACG or National SMART Grant.
Discussion: The Secretary believes that the public will benefit from a
complete set of regulations to implement the ACG and National SMART Grant
programs, rather than providing cross-references to the Federal Pell Grant
Program regulations throughout the ACG and National SMART Grant regulations.
Changes: None.
Section 691.75 Determination
of Eligibility for Payment
Comments: With respect
to the institution's determination about whether a student is pursuing
an eligible major at the beginning of a payment period, one commenter
suggested changing ``is no longer pursuing a required major'' in Sec.
691.75(b)(3) to ``is not pursuing a required major'' to cover not only
those situations in which the student had at one time (before the beginning
of the payment period) been pursuing an eligible major, but stopped doing
so, but also situations in which the student had never pursued, and is
still not pursuing, an eligible major.
Discussion: The Secretary agrees with the commenter's suggestion. With
this change, all situations in which the institution determines that the
student is not pursuing a required major at the beginning of the payment
period will be covered. Then, as the regulations go on to address, if
the institution reverses a determination before the end of the payment
period, the institution may pay the student a National SMART Grant for
the entire payment period.
Changes: Section 691.75(b)(3) and (c) has been revised to change ``is
no longer pursuing a required major'' to ``is not pursuing a
required major.''
Comments: One commenter asked how the financial aid office should deal
with eligibility for a student for a National SMART Grant if the student
was one hour short of being a junior at the beginning of one term, but
reached junior status by the next term. The commenter asked if the aid
office should start paying such a National SMART Grant in the middle of
the academic year. The commenter also asked whether the aid office should
pay a student for the spring and summer terms only, if the student does
not have at least a 3.0 GPA before fall starts but does before spring.
The commenter also asked about the National SMART Grant eligibility of
a student who changed to an ineligible major. The commenter asked whether
the aid office would stop paying the student at the point at which the
student changed to an ineligible major or would retroactively take the
National SMART Grant away from the student entirely.
Another commenter asked what should be done if a student has a 3.0 GPA
when the fall term starts but drops below that average after (the previous
term's) grades are posted. The commenter also wanted to know what would
happen if the student's GPA was back up to at least 3.0 by the spring
term. Another commenter asked how grades of incomplete are to be considered
with respect to the GPA requirement. Another commenter asked for clarification
of how an institution should determine GPA and academic year level when
the institution first becomes aware of a student's prior postsecondary
attendance after the student's transfer credits for fall attendance (for
which no aid was received) are received late in the spring semester.
Finally, several commenters raised an issue related to eligible students
who, in fact, did meet during the payment period in question with the
eligibility requirements for an ACG or a National SMART Grant associated
with the GPA or with the declaration of an eligible major, but for whom
the institution erred when it determined that the students failed to meet
those requirements and did not discover its mistake until after the end
of that payment period. The commenters suggested that these students should
receive a grant for the completed payment period.
Discussion: Section 691.75 addresses the factors that an institution must
consider to determine that a student is eligible each time it makes a
payment to a student of an ACG and a National SMART Grant. Section 691.75(a)(1)
provides that the institution has to determine that the student meets
the eligibility criteria listed in Sec. 691.15. For a National SMART Grant,
one of those eligibility criteria is that the student be in the third
or fourth academic year of an eligible program. (Note that the third academic
year of the student's program is not necessarily synonymous with the junior
year of the student's program.) Nevertheless, if the student is one hour
short of starting his or her third academic year at the beginning of a
term (e.g., the fall term), but begins the third academic year by the
next term (the spring term) (presumably at the beginning of that term),
then the student, if otherwise eligible, qualifies for a National SMART
Grant for that spring term. The student would not qualify for a National
SMART Grant payment for the fall term in this example but may qualify
for any remaining second-academic-year ACG eligibility for this fall term.
The institution would start paying the National SMART Grant in the middle
of the institution's year, i.e., at the beginning of the spring term.
This issue is further clarified in Sec. 691.63(h), which provides that,
in the case of a payment period with two academic years, an institution
must calculate the payment for the payment period using the ACG or National
SMART Grant Scheduled Award of the academic year being completed.
With regard to a student who does not have at least a 3.0 GPA (for the
first academic year for a second-year ACG, and for the most recently completed
payment period in the student's eligible program for a National SMART
Grant) before fall starts, but does before spring, Sec. 691.75(b)(2) and
(3) indicates that the student, if otherwise eligible, can receive an
ACG or National SMART Grant for the entire fall term if the institution
determines that the student has the required minimum 3.0 GPA before the
end of the fall term. On the other hand, if the institution does not make
the determination that the student has at least a 3.0 GPA until after
the end of the fall term, then, under Sec. 691.75(c), the student cannot
receive an ACG or National SMART Grant for the fall term.
With respect to an eligible student who is receiving a National SMART
Grant, but then changes to an ineligible major (and does not change back
to an eligible major), the institution may not make any additional National
SMART Grant payments (for the payment period in which the change of majors
took place or for future payment periods) to the student once the student
has changed to the ineligible major, regardless of whether that change
is made at the end of a payment period or during the payment period. However,
any payments that were made to an eligible student before he or she changed
to an ineligible major are legitimate payments and do not have to be repaid.
When a student has a 3.0 GPA when the fall term begins, but that GPA at
that time does not include grades from the previous term, the institution
may not have all of the information it needs to determine whether the
student is eligible for an ACG or National SMART Grant. For the ACG for
the second academic year of the student's eligible program, the HEA requires
that the student have at least a 3.0 GPA for the first academic year of
his or her eligible program. For the National SMART Grant, the requirement
is that the student have at least a 3.0 GPA for his or her courses in
the eligible program up through the most recently completed payment period
(term in this example). For either program, if there are courses that
have been taken in the previous term that are part of the coursework for
which the student must have at least a 3.0 GPA and grades for those courses
are not yet available, Sec. 691.75(d) provides that the institution may
make one interim disbursement for a payment period. However, when those
grades become available, they must be factored into the GPA. At that time,
if the student does not have the required GPA, the payment made by the
institution before the student's GPA could be calculated becomes an overpayment
that must be repaid by the institution. These provisions would apply,
as well, to any applicable coursework for which the student initially
received a grade of incomplete.
If information about a student's transfer of credit from another institution
comes to the institution's attention late in, or after, a term, the institution
may have already made a determination of eligibility that did not consider
that information. If that information affects a student's GPA or academic
year level and thus could affect the student's eligibility for an ACG
or National SMART Grant, the institution must factor it into its determination
of the student's eligibility and take appropriate action. Regarding erroneous
determinations by an institution that, for a particular payment period,
an otherwise eligible student did not have the required GPA or had not
declared an eligible major, if such a student in fact had satisfied those
requirements during that payment period, that student would be eligible
for a payment of the applicable grant regardless of whether the institution
discovered its mistake before or after the completion of that payment
period.
Section 691.78 Method
of Disbursement--By Check or Credit to a Student's Account
Comments: Several
commenters noted that Sec. 691.78(b), which addresses the return of funds
paid to a student who leaves the institution before the first day of classes,
seems duplicative of Sec. 668.21. In addition, the commenters also found
references to award year in Sec. 691.78(c) confusing, as ACG and National
SMART Grant awards are determined on an academic year basis.
Discussion: The Secretary agrees that Sec. 691.78(b) is redundant. The
use of the term ``award year'' in Sec. 691.78(c) is appropriate even though
a particular student's eligibility is determined based on the student's
completion of an academic year not an award year. Funds for the ACG and
National SMART Grant are appropriated for an award year, which is separate
and distinct from the eligibility determination. The language in Sec.
691.78(c) addresses what actions must occur when delivering funds to a
student during an award year.
Changes: The Secretary has removed Sec. 691.78(b) and made a conforming
change by removing the provision from Sec. 690.78 of the Federal Pell
Grant Program regulations.
Section 691.80 Redeterminations
of Eligibility for a Grant Award
Comments: One commenter
asked the Secretary to clarify how ACG and National SMART Grant funds
should be handled if a student receives the funds prior to dropping to
a less than full-time enrollment status. Specifically, the commenter wanted
to know whether the institution must remove the funds from the student's
account, or prorate the funds as an institution would be required to do
with Federal Pell Grant funds.
Discussion: According to Sec. 691.80(b), when there is a change in the
student's enrollment status, the institution's policy for recalculating
awards takes effect. For example, an institution's policy may establish
a recalculation date at the end of its drop-add period (also known as
a census date) by which the student's enrollment status for the term will
be finalized. The enrollment status is, thus, defined as the number of
credit hours the student is enrolled in at the census date. Under such
a policy, if a student was enrolled full-time at the beginning of the
term but, by the census date, the student had dropped to half-time enrollment
status, the institution must use the half-time enrollment status to determine
eligibility for the ACG or National SMART Grant. Because the HEA requires
full-time enrollment, the student in this example would not be eligible
for the ACG or National SMART Grant for that term, and any ACG or National
SMART Grant funds disbursed for that term would have to be repaid by the
student. On the other hand, if the student dropped below full-time enrollment
after the recalculation date, his or her ACG or National SMART Grant award
would be based upon full-time enrollment.
Situations in which information is received after a determination of eligibility
has been made are governed by Sec. 668.16(f), which states that an institution
must identify and resolve discrepancies that arise from the institution's
receipt of any information that has bearing on a student's eligibility
for funds under the title IV, HEA programs. If that information affects
the amounts and or types of title IV aid the student is receiving or may
be eligible to receive, the institution must take appropriate actions.
Changes: None.
[[Page 64416]]
Section 691.83 Submission
of Reports
Comments: Several
commenters asked the Secretary to clarify whether the Secretary intends
to include the academic year level of a grant in the payment data submitted
by institutions. The commenters noted that, without this information in
the National Student Loan Data System (NSLDS), an institution would not
know whether a transfer student had already received grant funds at a
given award level, as the grant level will not always be apparent from
the award (for example, if the grant amount has been reduced to avoid
an overaward).
Discussion: In addition to data similar to what is submitted to the Secretary
through the Common Origination and Disbursement (COD) system, institutions
will also provide the academic year for the award for both the ACG and
National SMART Grant programs. This information will be available to institution
through the NSLDS, which will reflect the academic year completed by the
student. Institutions will also provide information on the rigorous secondary
school program of study that was used to confirm eligibility for an ACG
and the student's academic major (using CIP codes) for a National SMART
Grant. Specifications for this COD reporting has been posted to the department's
Information for Financial Aid Professionals Web site.
Changes: None.
Executive Order 12866
Regulatory Impact
Analysis
Under Executive
Order 12866, the Secretary must determine whether this regulatory action
is ``significant'' and therefore subject to the requirements of the Executive
Order and subject to review by the OMB. Under section 3(f) of Executive
Order 12866, the order defines a ``significant regulatory action'' as
an action that is likely to result in a rule (1) having an annual effect
on the economy of $100 million or more, or adversely and materially affecting
a sector of the economy, productivity, competition, jobs, the environment,
public health or safety, or State, local or tribal governments or communities
(also referred to as ``economically significant''); (2) creating serious
inconsistency or otherwise interfering with an action taken or planned
by another agency; (3) materially altering the budgetary impacts of entitlement
grants, user fees, or loan programs or the rights and obligations of recipients
thereof; or (4) raising novel legal or policy issues arising out of legal
mandates, the President's priorities, or the principles set forth in the
Executive Order. Pursuant to the terms of the Executive Order, it has
been determined that this regulatory action will have an annual effect
on the economy of more than $100 million. Therefore, this action is ``economically
significant'' and subject to OMB review under section 3(f)(4) of Executive
Order 12866. The Secretary accordingly has assessed the potential costs
and benefits of this regulatory action and has determined that the benefits
justify the costs.
Need for Federal
Regulatory Action
As noted above,
these final regulations are needed to implement two programs created in
the HERA. The ACG program provides need-based grants to encourage students
to complete rigorous secondary school programs of study. The National
SMART Grant Program provides need-based grants to encourage students to
major in certain scientific and technical fields or foreign languages
deemed vital to national security. Section 401A(c)(3)(B)(ii) and (3)(C)(ii)
of the HEA specifically requires the Secretary of Education to issue regulations
implementing these programs.
The Secretary had limited discretion in implementing these grant programs;
the number of recipients and aid awarded is largely driven by statutory
eligibility requirements such as that students be eligible to receive
a Federal Pell Grant, be United States citizens, attend two-or four-year
degree-granting institutions on a full-time basis, and, in some cases,
maintain a 3.0 GPA. The Secretary has exercised discretion in the areas
of program eligibility relating to the definition of a rigorous secondary
school program of study in the case of the ACG Program and, for the National
SMART Grant Program, the definition of qualifying fields of study. In
both these cases, the Secretary has regulated to reflect clear congressional
intent.
Benefits
By facilitating
the implementation of these new programs, these final regulations will
support the provision of over $4 billion in need-based student aid over
the next five years. The ACG Program will benefit society by providing
an incentive for students to complete a rigorous secondary school program
of study, which research indicates increases the likelihood of successful
completion of postsecondary education. The National SMART Grant Program
will encourage students to major in technical fields or critical foreign
languages. In the case of technical fields, these majors will benefit
both national and individual competitiveness, increasing the nation's
economic security. With respect to foreign languages, increases in the
number of fluent speakers of Arabic, Farsi, Uzbek, and other critical
languages would broaden understanding of important cultures and contribute
significantly to ongoing efforts to combat international terrorism. In
addition, awards under both programs serve to reduce a student's net cost
of education. Research indicates that reduction in a student's cost of
education correlates with increased student persistence and degree attainment.
Data consistently show that postsecondary degree holders have substantially
higher lifetime earnings than high school graduates.
Costs
These programs are
supported with $4.5 billion in mandatory appropriations: $790 million
for fiscal year 2006, $850 million for fiscal year 2007, $920 million
for fiscal year 2008, $960 million for 2009, and $1,010 million for 2010.
Funds not expended in one year may be carried forward to support awards
in the subsequent year. If the estimated number of recipients exceeds
the available funding for a given fiscal year, award levels would be ratably
reduced.
SEE PDF FOR Table
The average awards
displayed in Table 1 are less than the statutory maximum awards due to
the cost of attendance limit on ACG and National SMART Grant awards. In
addition, average awards also reflect students who are eligible for an
ACG or National SMART Grant for less than the full award year. Figures
in Table 1 may not add due to rounding.
Because these programs are title IV, HEA programs and eligibility for
these programs is linked to Federal Pell Grant eligibility, participating
institutions must already meet Federal student aid institutional eligibility
requirements. In addition, the delivery system and many program operational
requirements for the new programs are patterned after those that institutions
are already using for
Federal Pell Grants. Accordingly, institutions wishing to participate
in the new programs have already absorbed most of the administrative costs
related to implementing these final regulations. Marginal costs over this
baseline are primarily related to initial, and ongoing eligibility determinations
are minimal. Most data needed to make these determinations, such as student
citizenship, full-time status, major, and GPA, are generally already available
to institutions.
In response to the public comment on the interim final regulations, the
Department has made changes in these final regulations. The only significant
change with economic impact is to permit students to receive an ACG or
National SMART Grant for a payment period during which they are not receiving
a Federal Pell Grant. This change will enable 32,000 more students to
receive grants in 2006. It will also increase the cost of the programs
by $27 million in 2006 and by $145 million between 2006-2010. The Secretary
requested comments on the regulatory impact analysis in the interim final
regulations, but received none.
Assumptions, Limitations,
and Data Sources
Because these final
regulations largely restate statutory requirements that would be self-implementing
in the absence of regulatory action, cost estimates provided above reflect
a prestatutory baseline in which the ACG and National SMART Grant programs
do not exist. Given the limited data available, estimates for 2007-2008
do not assume program benefits will induce increased student participation.
Costs have been quantified for only two years because the Secretary plans
to revise these final regulations through negotiated rule-making, after
which more comprehensive cost analyses for subsequent years will be developed.
In developing these estimates, data from the 2004 National Postsecondary
Student Aid Survey was used to derive the percentage of students meeting
initial eligibility requirements for ACG and National SMART Grant awards,
including enrollment status, Federal Pell Grant eligibility, citizenship,
academic major, and GPA. The 1994 National Education Longitudinal Study,
1996 Beginning Postsecondary Student Survey, and 2000 National Assessment
of Educational Progress High School Transcript Study were used to derive
the percentage of students otherwise eligible for an ACG who had successfully
completed a rigorous secondary school program of study. All these studies
were conducted by the National Center for Education Statistics.
Regulatory Alternatives
Considered
In defining eligibility
requirements, particularly those related to rigorous secondary school
programs of study, these final regulations strike a balance between complete
State discretion, which could create confusion and regional inequalities
and result in overly generous criteria that dramatically reduce award
levels, and an overly prescriptive national determination that would significantly
alter the traditional State role in determining secondary school curricula.
More specifically, in considering the definition of a rigorous secondary
school program of study, the Secretary considered a variety of combinations
of coursework and other possible measures. For example, at the time of
the release of the President's fiscal year 2007 budget, preliminary estimates
assumed a rigorous program of study would consist of four English, three
social science, three science, three mathematics, and two foreign language
courses. Under this scenario, an estimated 439,000 students would receive
$400 million in ACG awards in 2006-2007--compared with $340 million to
420,000 students under these final regulations. In subsequently considering
the recognition of rigorous secondary school programs, the Secretary determined
it would be more appropriate to include as one option secondary school
programs of study with specific coursework requirements, such as, for
mathematics, algebra I and a higher level course such as algebra II, geometry,
or data analysis and statistics, and for science, at least two years with
one year each of biology, chemistry or physics, as well as an advanced
or honors program. In addition, the Secretary included students who complete
secondary school programs and receive specified scores on the Advanced
Placement or International Baccalaureate examinations. The latter provisions
offer additional flexibility to individual students attending private
or home schools.
This approach is consistent with the programs' statutory purpose of creating
incentives for certain student behaviors. To achieve this purpose, the
grant level must be large enough to provide a meaningful incentive, yet
at the same time, program flexibility must be sufficient to allow States
and participating institution to recognize broad differences in secondary
school and higher education academic structures.
Elsewhere in this SUPPLEMENTARY INFORMATION section we identify and explain
burdens specifically associated with information collection requirements.
See the heading Paperwork
Reduction Act of 1995.
Accounting Statement
As required by OMB
Circular A-4 (available at http://www.Whitehouse.gov/omb/Circulars/a004/a-4.pdf),
in Table 2 below, we have prepared an accounting statement showing the
classification of the expenditures associated with the provisions of these
final regulations. This table provides our best estimate of the increase
in Federal student aid payments as a result of these final regulations.
All
expenditures are classified as transfers to postsecondary students.
TABLE 1.--ESTIMATED
PROGRAM PARTICPATION - CHART OMITTED SEE PDF
We received no comments
on the Paperwork Reduction Act portion of the interim final rule.
OMB has approved the information collection requests identified in the
interim final regulations and has assigned the following numbers to the
collection of information in these final regulations: 1845-0001, 1845-0039,
1845-0078.
Intergovernmental
Review
This program is
subject to Executive Order 12372 and the regulations in 34 CFR part 79.
One of the objectives of the Executive order is to foster an intergovernmental
partnership and a strengthened federalism. The Executive order relies
on processes developed by State and local governments for coordination
and review of proposed Federal financial assistance. This document provides
early notification of our specific plans and actions for this program.
Assessment of Educational
Impact
Based on our own
review, we have determined that these final regulations do not require
transmission of information that any other agency or authority of the
United States gathers or makes available.
Electronic Access
to This Document
You may view this
document, as well as all other Department of Education documents published
in the Federal Register, in text or Adobe Portable Document Format (PDF)
on the Internet at the following site: http://www.ed.gov/news/Fedregister.
To use PDF you must
have Adobe Acrobat Reader, which is available free at this site. If you
have questions about using PDF, call the U.S. Government Printing Office
(GPO), toll free, at 1-888-293-6498; or in the Washington, DC, area at
(202) 512-1530.
Note: The official version of this document is the document published
in the Federal Register. Free Internet access to the official edition
of the Federal Register and the Code of Federal Regulations is available
on GPO Access at: http://www.gpoaccess.gov/index.html.
(Catalog of Federal
Domestic Assistance Numbers: 84.375 Academic Competitiveness Grants; 84.376
National SMART Grants)
List of Subjects
in 34 CFR Parts 668, 690, and 691
Colleges and universities,
Elementary and secondary education, Grant programs--education, Student
aid.
Dated: October 25,
2006.
Margaret Spellings, Secretary of Education.
0
For the reasons discussed in the preamble, the Secretary amends parts
668, 690, and 691 of title 34 of the Code of Federal Regulations as follows:
PART 668--STUDENT
ASSISTANCE GENERAL PROVISIONS
0
1. The authority citation for part 668 continues to read as follows:
Authority: 20 U.S.C.
1001, 1002, 1003, 1085, 1088, 1091, 1092, 1094, 1099c, and 1099c-1, unless
otherwise noted.
Sec. 668.2 [Amended]
0
2. Section 668.2 is amended in paragraph (b) in the definition of ``Valid
institutional student information report'' by removing the word ``report''
and adding in its place the word ``record'' each place it appears.
Sec. 668.51 [Amended]
0
3. Section 668.51 is amended in paragraph (a) by adding the words ``ACG,
National SMART Grant,'' immediately after the words ``Federal Pell Grant,''.
0
4. Section 668.52 is amended by:
0
A. Revising the definition of ``Institutional student information report''.
0
B. Revising the definition of ``Student aid application.''
The revisions read as follows:
Sec. 668.52 Definitions.
* * * * *
Institutional student information record as defined in 34 CFR 690.2 and
691.2 for purposes of the Federal Pell Grant, ACG, National SMART Grant,
Federal Perkins Loan, FWS, FSEOG, Federal Stafford Loan, and William D.
Ford Federal Direct Loan programs. Student aid application means an application
approved by the Secretary and submitted by a person to have his or her
EFC determined under the Federal Pell Grant, ACG, National SMART Grant,
Federal Perkins Loan, FWS, FSEOG, Federal Stafford Loan, or William D.
Ford Federal Direct Loan programs.
* * * * *
Sec. 668.54 [Amended]
0
5. Section 668.54 is amended in paragraph (a)(2)(i) by adding the words
``ACG, National SMART Grant,'' immediately after the words ``Federal Pell
Grant,''.
Sec. 668.55 [Amended]
0
6. Section 668.55 is amended by:
0
A. In the introductory text to paragraph (c), adding the words ``ACG,
National SMART Grant,'' immediately after the words ``Federal Pell Grant,''.
0
B. In paragraph (c)(1), adding the words ``, ACG, National SMART Grant,''
immediately after the words ``Federal Pell Grant''.
0
C. In paragraph (c)(2), adding the words ``, ACG, National SMART Grant,''
immediately after the words ``Federal Pell Grant''; and by removing the
punctuation ``,'' after the word ``campus-based''.
Sec. 668.58 [Amended]
0
7. Section 668.58 is amended by:
0
A. In paragraph (a)(1)(i), adding the words ``, ACG, National SMART Grant,''
immediately after the words ``Federal Pell Grant''.
0
B. In paragraph (a)(2)(i), adding the words ``ACG, National SMART Grant,
or'' immediately after the words ``Federal Pell Grant,''.
0
C. In paragraph (a)(2)(ii)(A), adding the words ``ACG, National SMART
Grant,'' immediately after the words ``Federal Pell Grant,''.
Sec. 668.59 [Amended]
0
8. Section 668.59 is amended by:
0
A. In the introductory text to paragraph (a), removing the words ``Federal
Pell Grant Program'' and adding, in their place, the words ``Federal Pell
Grant, ACG, and National SMART Grant programs''.
[[Page 64419]]
0
B. In paragraph (a)(1)(i), adding the words ``, ACG, or National SMART
Grant'' immediately after the words ``Federal Pell Grant''.
0
C. In paragraph (a)(2) introductory text, adding the words ``, ACG, or
National SMART Grant'' immediately after the words ``Federal Pell Grant''.
0
D. In the introductory text to paragraph (b), removing the words ``Federal
Pell Grant Program'' and adding, in their place, the words ``Federal Pell
Grant, ACG, and National SMART Grant Programs''.
0
E. In paragraph (b)(1), adding the words ``, ACG, or National SMART Grant''
immediately after the words ``Federal Pell Grant''.
0
F. In paragraph (b)(2)(i)(B), adding the words ``, ACG, or National SMART
Grant'' immediately after the words ``Federal Pell Grant''.
0
G. In paragraph (b)(2)(ii)(A), adding the words ``, ACG, or National SMART
Grant'' immediately after the words ``Federal Pell Grant''.
Sec. 668.60 [Amended]
0
9. Section 668.60 is amended by:
0
A. In the introductory text to paragraph (c), removing the words ``Federal
Pell Grant Program'' and adding, in their place, the words ``Federal Pell
Grant, ACG, and National SMART Grant programs''.
0
B. In paragraph (c)(1), adding the words ``and 691.61'' immediately after
the regulatory citation ``690.61''.
0
C. In paragraph (c)(2)(i), adding the words ``, ACG, or National SMART
Grant'' immediately after the words ``Federal Pell Grant''.
0
D. In paragraph (c)(2)(ii), adding the words ``, ACG, or National SMART
Grant'' immediately after the words ``Federal Pell Grant''.
0
E. In paragraph (d) by adding the words ``ACG, or National SMART Grant
program assistance,'' immediately after the words ``Federal Pell Grant,''.
Sec. 668.61 [Amended]
0
10. Section 668.61 is amended in paragraph (a)(2)(ii)(B) by adding the
words ``ACG, National SMART Grant,'' immediately after the words ``Federal
Pell Grant,''.
PART 690--FEDERAL
PELL GRANT PROGRAM
0
11. The authority citation for part 690 continues to read as follows:
Authority: 20 U.S.C.
1070a, unless otherwise noted.
Sec. 690.78 [Amended]
0
12. Section 690.78 is amended by removing paragraph (b) and redesignating
paragraph (c) as paragraph (b).
PART 691--ACADEMIC
COMPETITIVENESS GRANT (ACG) AND NATIONAL SCIENCE AND MATHEMATICS ACCESS
TO RETAIN TALENT GRANT (NATIONAL SMART GRANT) PROGRAMS
0
13. The authority citation for part 691 continues to read as follows:
Authority: 20 U.S.C.
1070a-1, unless otherwise noted.
0
14. Section 691.6 is amended by revising paragraphs (a) and (b) to read
as follows:
Sec. 691.6 Duration of student eligibility--undergraduate course of study.
(a) A student is
eligible to receive up to one ACG Scheduled Award during each of the student's
first and second academic years of enrollment over the course of the student's
undergraduate education in all eligible programs as defined in Sec. 691.2(d).
(b) A student is eligible to receive up to one National SMART Grant Scheduled
Award during each of the student's third and fourth academic years of
enrollment over the course of the student's undergraduate education in
all eligible programs as defined in Sec. 691.2(d).
* * * * *
0
15. Section 691.15 is amended by:
0
A. In paragraph (a)(2), removing the words ``for the same payment period''
and adding, in their place, the words ``in the same award year''.
0
B. Revising paragraph (b)(1)(ii)(B).
0
C. In paragraph (b)(1)(iii)(C), removing the words ``at least''.
0
D. In paragraph (c)(3), removing the words ``at least''.
The revision reads as follows:
Sec. 691.15 Eligibility
to receive a grant.
* * * * *
(b) * * *
(1) * * *
(ii) * * *
(B) Has not previously been enrolled as a regular student in an eligible
program while enrolled in high school;
* * * * *
0
16. Section 691.16 is amended in paragraph (d)(4) by removing the words
``in the'' and adding, in their place, the words ``from an''.
Sec. 691.62 [Amended]
0
17. Section 691.62 is amended in paragraph (c) by removing the regulatory
citations ``, 682.200(b), and 685.102(b)''.
Sec. 691.65 [Amended]
0
18. Section 691.65 is amended in paragraph (a)(2) by removing the words
``for the same payment period'' and adding, in their place, the words
``in the same award year''.
Sec. 691.75 [Amended]
0
19. Section 691.75 is amended by:
0
A. In paragraph (b)(3), removing the words ``is no longer pursuing'' and
adding, in their place, the words ``is not pursuing''.
0
B. In paragraph (c), removing the words ``is no longer pursuing'' and
adding, in their place, the words ``is not pursuing''.
Sec. 691.78 [Amended]
0
20. Section 691.78 is amended by removing paragraph (b) and redesignating
paragraph (c) as paragraph (b).
0
21. Section 691.80(a) is revised to read as follows:
Sec. 691.80 Redetermination of eligibility for a grant award.
(a) Change in receipt
of Federal Pell Grant. If, after the beginning of an award year, a student
otherwise eligible for an ACG or a National SMART Grant begins or ceases
to receive a Federal Pell Grant in that award year, the institution must
redetermine the student's eligibility for an ACG or a National SMART Grant
in that award year.
* * * * *
[FR Doc. E6-18197 Filed 10-31-06; 8:45 am]
BILLING CODE 4000-01-P
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